A stroke of Gov. Phil; Bryant’s pen April 23 brought to a close Mississippi’s short-lived experiment in granting sales tax rebates to new retail shopping as a way to boost visitor numbers and create jobs.
The Mississippi Development Authority so far has awarded up to $155 million in potential subsidies for three shopping malls since legislators widened the sales tax rebate program last year to include “cultural retail attractions,” or what are more commonly known as retail centers and shopping malls. House Bill 1358 puts an end to the rebates – at least for now.
HB1358 sponsor Rep. Rita Martinson, a Madison Republican, proposed in an earlier bill — HB1233 – to extend the incentives for three more years. Lawmakers balked at giving the renewal a vote, arguing the state has a dearth of evidence that the incentives brought much value to the state beyond creating low-paid retail jobs and created unfair competition for merchants not receiving the tax incentives.
With more study and hard data to provide their value, the sales tax rebates could return.
Martinson said in an interview with The Associated Press she thinks incentives have been helpful, but conceded: “It might be at the point to sit back and see what we’ve done.”
The incentives that expire on July 1 returned 80 percent of sales taxes collected at a development over 10 years, until the total collected reaches 30 percent of the construction price.
Many economists voice doubts about subsidizing retail development. Good Jobs First, a nonprofit group that is skeptical of business subsidies, is particularly critical of giving money to retailers, saying they don’t pay well or create spinoff jobs, the AP reported.
“Building new retail space doesn’t grow the economy, it just moves sales and lousy jobs around,” the group writes.
The first retail development to qualify for the widened incentives was Pearl’s Outlets of Mississippi, where Spectrum Capital could get up to $24 million of its $80 million investment back. That mall opened in November.
Since then, Memphis developers have won certification for the proposed Outlet Shops of the Mid-South in Southaven, which could get $34 million of its $113 million construction cost.
Now, the third and largest development has been certified. CBL & Associates has been approved for up to $96.3 million of a projected $321 million investment for the Gulf Coast Galleria, which it hopes to build in D’Iberville, according to the AP.
MDA has also certified developers of a proposed Westin hotel in downtown Jackson to collect up to $15.7 million from their proposed $52.3 million investment. Hotels, museums and other tourist attractions were already eligible for the rebates before last year, but may not reach the 30 percent ceiling. Jackson’s King Edward Hotel had only collected $1 million of up to $19.5 million by the middle of 2013.
Through mid-2013, the program had paid out only $20.8 million. Of that, almost 75 percent went to another stage of the Pearl development including a Bass Pro Shops store and the Trustmark Park baseball stadium, AP reported.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info